Health nominee Azar is no stranger to management controversy

By BRIAN SLODYSKONovember 30, 2017

In this Nov. 29, 2017 photo, Alex Azar, President Donald Trump's nominee to become Secretary of Health and Human Services, testifies during a Senate Health, Education, Labor and Pensions Committee confirmation hearing on Capitol Hill in Washington. Azar, nominated to take over the job of outgoing Health Secretary Tom Price, who resigned over his use of private jets, once defended a government official who spent public money on golf fees, steak dinners and Super Bowl tickets. (AP Photo/Carolyn Kaster)

INDIANAPOLIS (AP) — Alex Azar, who’s in line to replace a Trump Cabinet secretary who was forced out in controversy, is no stranger to sticky management problems.

In Washington, he’s been nominated to replace Tom Price, who resigned in September over questions about his use of private jets. Back in Indiana, Azar was an influential member of a public airport board, tasked with oversight of human resources matters, when he defended the conduct of the airport CEO who was under fire for spending public money on travel, golf fees, steak dinners and Super Bowl tickets.

Azar, a former Eli Lilly and Co. executive, served three years on the board of the Indianapolis Airport Authority as it struggled to contain CEO John D. Clark III, who by some estimates racked up more than $200,000 in publicly funded travel, according to interviews and an Associated Press review of records. Clark was hired as the airport’s CEO in 2009, around the time Azar joined the board. Azar defended Clark in public statements amid serious questions about spending, even as board members privately concluded that Clark’s behavior was causing a problem.

Senators’ skepticism at Azar’s confirmation hearing this week has focused on such issues as his willingness to stand up for consumers rather than “Big Pharma” as a former executive at Lilly, the Indiana drug giant.

But Clark’s spending and Azar’s defense of him also could hamper Republican efforts to move past the issue of Price’s own travel spending. Price, a millionaire Cabinet secretary, resigned after disclosures that he used private jets for government business trips, even for trips as short as Washington to Philadelphia. The overall cost to the government exceeded hundreds of thousands of dollars.

“It’s kind of a wild story. I see the parallels there,” says Michael Wells, a longtime former board president who was brought back in 2012 to rein Clark in. Wells, a Republican, praised Azar as “attentive, very knowledgeable and businesslike.”

Azar has been described as a well-respected business voice and chairman of the airport board’s human resources committee. He played a substantial role and helped shape policies related to employee spending, according to records and former board members.

CEO Clark, meanwhile, showed a fondness for plush hotels and steakhouses, quickly ringing up about $37,000 in expenses, records show. In the years that followed his hiring, Clark used public money to golf, attend two Super Bowls and travel to a Phoenix resort for a $2,500 event described only as a business development “boot camp” in airport records.

Airport officials told the AP they could not immediately provide a full accounting of Clark’s spending because some records were kept in a remote warehouse. A limited number of expense documents released to the AP showed he spent at least $100,000 on travel, meals and meetings during his tenure. That included a trip to New Delhi, a $2,200 conference in Bermuda and $10,080 for a three-day meeting in Zurich with officials from Comlux Aviation, a VIP flight service that already had a facility at the Indianapolis airport. In 2011, a five-day stay at the Palmeraie Golf Palace in Marrakesh, Morocco, cost $8,300, according to receipts.

In 2010, Florida authorities, too, had conducted an investigation into Clark’s spending when he worked for a Jacksonville airport, though he was not charged.

Privately Indianapolis airport board members were frustrated, though they did not take action to fire Clark. In public, Azar defended him.

“Travel, both domestic and international, for business development purposes is an essential job requirement for John,” Azar said in a statement to Indianapolis TV station WTHR in September 2010.

That statement came as the station aired a story highlighting Clark’s spending, as well as a February 2010 reckless driving arrest hours after he hosted airline representatives at a Super Bowl in Miami. Police clocked him driving 135 mph on a Florida interstate.

“Because of his forthrightness with us and because of our confidence in him, we have no plans to investigate the matter further and John remains in our complete confidence,” Azar said. As for the speeding, Azar noted that Clark “was in his personal car and on his own time.”

A spokesman for Azar declined to comment Tuesday. The airport authority did not respond to a detailed list of questions from the AP.

Clark could not be reached for comment. He stepped down as airport CEO in 2012 after accepting a $270,000 severance package, which occurred around the time Azar left the board.

Indianapolis news outlets reported at the time that his total spending on the job had topped $200,000.

As an airport board member, there was only so much Azar could do about Clark’s spending, said Kelly Flynn, a Democrat who remains on the board.

In fact, Azar helped develop stricter rules on employee expenditures, but Wells said Clark found a way around them.

“We were all in complete agreement that it was time for a new guy,” Flynn said of Clark.

Azar, like some other members of the part-time board, comes from a buttoned-down business background, Wells said. That may have made it difficult to manage an unpredictable “cowboy” like Clark, he said.

“People like John Clark don’t exist at Lilly — they wouldn’t make it in the front door,” Wells said. “They were not used to a gunslinger, and they didn’t think they had to check the guy’s expense reports with a fine-tooth comb.”